Homebuyers Keep Waiting for the Silver Tsunami. It Might Not Show Up

More homes are being inherited than ever, raising the question of whether the long-awaited “Silver Tsunami” is finally here.

Baby boomers are sitting on nearly $19 trillion in housing, or nearly half of the nation’s real estate wealth. For years, the industry has expected that stock to hit the market as owners downsize or sell, but new research from data analytics firm Cotality suggests the wave may not materialize as expected.

A record number of homes—340,000—across the U.S. changed hands through inheritance in the 12 month period ending in August 2025, according to the report, forcing a new set of questions about how (and when) this supply will actually show up for buyers.

“The implicit assumption we believe many are making is that the current generation of seniors will downsize and move on from their homes at similar ages and similar rates as previous generations,” explains Cotality principal economist Matt Delventhal, but, he suggests, this may not be the case.

California may hold the earliest clues. 

The state had the highest share of inherited homes, showing how affordability strain and lucrative tax incentives can keep properties in the family—turning the expected tsunami into a trickle of listings.

Hopes for a flood of homes

On paper, the inheritance spike looks like the first crest of that long-awaited wave. But the numbers tell a more complicated story.

The 340,000 homes Cotality identified represent 7.4% of all transactions in 2025, the highest share in the data’s history. That’s the clearest sign yet that America’s massive boomer-held housing stock is starting to change hands.

But zooming out, those 340,000 inherited transfers pale in comparison to the roughly 30,000,000 homes owned by householders aged 65 or older, according to Hannah Jones, senior economic research analyst at Realtor.com®. 

Which means that even as inheritance-driven turnover hits a record, it’s not close to the kind of market-moving inventory surge buyers have been waiting for. In that sense, the more striking trend may be what’s not happening. 

“Though this is a significant development, it is perhaps more notable how many older homeowners are staying put for longer,” says Jones.

“Recent 'aging in place' trends suggest that the transfer of property between generations may be more of a trickle than a flood,” she adds. “For younger households, inheriting a property or inheriting the proceeds from selling a property could be hugely instrumental in accessing homeownership, which remains largely out-of-reach for lower earning households, which most young households are.”

That dynamic is already showing up in how younger adults are coping with today’s affordability crunch. In 2023, 18% of adults ages 25 to 34 were living in a parent’s home, according to Pew Research—and a majority said the arrangement was good for their finances.

Inheritance, in other words, could become a more important pathway into homeownership for some households, without translating into broad inventory relief for the rest of the market.

What will happen to all of these homes?

Regardless of how they change hands—on the market or through inheritance—those 30 million homes will change owners in the decades to come.

In theory, an inherited home can help ease the housing crunch just as much as if it had hit the open market. But it comes with a major caveat.

“The risk in this scenario is inefficiency around matching, such as passing down a home that doesn't quite fit the needs of the heir, but is held on to nonetheless,” explains Jones.

It’s a mismatch that Ryann Brier, a real estate agent at City Lights Home Buyers in Michigan, sees all the time.

“The heirs don’t always want to sell, but these properties end up being more of a headache than anything,” he says. “Especially if they are far away or even out of state. It becomes a second job with utilities, lawn and snow care, maintenance they didn’t budget for, and paying for insurance, which alone has dramatically increased in the last few years.” 

Another risk is that the heirs decide to become landlords, and prevent the home from ever reaching the for-sale market. Or that the asset runs into legal complications when passing from one generation to the next.

The result could translate into very muddy waters for the housing market, with units that quietly become owner-occupied housing, others that are converted into long-term rentals, and even more that hit the market only after a long legal delay.

While the early numbers point to this phenomenon starting to happen, more research is needed to understand what, exactly, happens to these homes. 

“We do not have a measurement of how many of the inherited units are resold versus used as residences,” explains Delventhal. “We consider this an area ripe for further research [and] data digging.”

The California problem

The market impact may ultimately come down to geography. 

In places where policy and prices reward holding on to a home, inheritance is poised to surge without producing fresh listings. California may already be emerging as an early case study.

Inheritance transfers accounted for a shocking 18% of all home transactions in the year examined by the study, the highest of any state and almost triple the national share.

Delventhal points to incentives like Proposition 13, California’s property-tax cap that has long been viewed as both a blessing and a curse for the state’s housing market. The law helps longtime owners stay put even as home values soar, but it also deepens the state’s lock-in effect, reducing turnover and tightening an already constrained supply.

As seniors age, those incentives become more valuable. Many homeowners opt to stay put rather than sell to preserve low tax bills for themselves and their heirs—who can inherit the protections along with the home if they are direct heirs (like a child or grandchild). Over time, that dynamic can keep homes circulating within families instead of returning to the open market, potentially freezing inventory for generations.

“In California, where homeowners are incentivized to pass on property, the popularity of the practice could mean fewer fresh listings hit the market, which could hurt inventory and drive prices higher. On the flip side, more households may be able to access homeownership through inheritance in an otherwise untenable market,” Jones says.

Once again, Pew Data may hold a clue here: In popular California metros, the share of 25- to 34-year-olds living with their parents reached as high as 33%—a sign of how far out of reach both homeownership and renting has become for many young adults, even in the places where jobs and opportunity concentrate.

And unlike in much of the country, California has a structural reason inheritance may be showing up at outsized rates. 

“New housing supply is limited in many other states, and none have anywhere near so high a share of inheritance transfers. For all past years that we looked at, including years with better new-construction numbers, the share of inheritance in California is abnormally high,” Delventhal says. “The Prop-13 tax incentives are completely unique—no other state has a similar regime.”

Given the pace of appreciation in California since the 1970s, he adds, the benefit of keeping a long-held home in the family can be enormous—“a difference of literally tens of thousands of dollars per year in many cases.” 

While Delventhal notes the team is “open to alternative explanations,” he says the pairing of “unique inheritance behavior and unique inheritance tax law” makes it natural to suspect the two are connected.

It could be a glimpse of what the “Silver Tsunami” might actually look like when it makes landfall: not a flood of new listings, but a reshuffling of homes within families—helping some heirs become owners, while leaving many buyers waiting for homes that never hit the market.